Starbucks organizational structure has evolved significantly over the decades. By 2007, the firm had expanded swiftly and roped in clients from worldwide for its strategic expansion. However, revenues declined considerably in 2007 for Starbucks. Due to the lack of focus on the experience of client, this deterioration was compounded. Once Howard Schultz regained the CEO’s post in 2008, the Starbucks Coffee’s overhaul of the organizational structure began, to bring back the customer experience back into prominence. The formation of new regional divisions along with improved training for staff at Starbucks Cafés was implemented. Therefore, as a consequence of the changes to enhance customer experiences and financial performance, Starbucks got its present organizational structure. Starbucks is the global leader in specialty coffee and beverages. The Starbucks organizational structure has a significant role to play behind its success, which has been thoroughly discussed in this article.
Starbucks Organizational Structure
In order to support the commercial development of the worldwide coffee sector, Starbucks corporation or the Starbucks Coffee Company employed a matrix organizational structure. The corporation being the world's largest coffee company retains its leadership in the industry partially by the soundness of its company structure. The organizational or corporate structure of a firm impacts all its major business sectors such as leadership and management, communications, methods of change strategies and management, and other elements of business success. Starbucks organizational structure has evolved to guarantee investors that it meets modern business requirements. For example, the corporation has adapted its corporate structure in a way that it could grow its business via the purchase of other firms like Ethos Water and Seattle's Best Coffee. This type of adaptation makes the organizational structure of Starbucks Corporation specific to the business demands. This arrangement fits within general typologies of organizational structure. Comparable to other multinational firms, the Starbucks corporation uses its special features of the organization to maintain the smoothness of operation and appropriate management of its activities.
Starbucks organizational structure enhances plays a major role in enhancing its competitive advantages. This competitive advantage is vital in the interaction with the industrial environment, which entails the fierce competitiveness seen in the analysis of Porter's five-force of Starbucks Corporation's analysis of Porter's five-force. The company has to compete against big and small coffee shops and food companies, like Dunkin Donuts, McDonald's, Wendy's and Burger King. Starbucks Corporation, through its successful organizational structure design and growth, maintains its growth on the world market, regardless of the competitive pressures of such companies. This structure also helps in adhering to the mission statement of Starbucks.
Type and Characteristics of Starbucks Organizational Structure
Starbucks organizational structure has evolved to facilitate the worldwide business growth of coffee as well as the coffee industry. It is a hybrid blend of distinct aspects from the main forms of an organization known as the matrix structure that is among the outstanding instances of effective organizational structure. Matrix structure is the integration of many organizational systems. In the structure of the matrix, the flow of the authority takes place in many ways.
The design of the structure in this example includes interconnections between different areas of the organization. For example, various divisions of the product of the corporation overlap with functional groups and geographical divisions, that overlap with other organizational sections in turn. The major traits of the Starbucks organizational structure are:
- Functional hierarchy
- divisions based on Geography
- Product-based divisions
Starbucks organizational structure follows a functional hierarchy about groups based on function-oriented business groups. For instance, the firm has a department for finance, HR, and marketing respectively. These departments become more active and gain importance at the uppermost echelons of the Starbucks organizational structure, present in its corporate head office. This is a hierarchical property. The Human Resources Department at the corporate level implements HR policies that apply to all the cafes of the firm. The functional structure of the hierarchy makes it easy for the CEO to monitor and govern the company in a top to down manner. Starbucks organizational structure has different functional groups which are responsible mainly for formulating and executing the most basic competitive strategy and intensive growth strategies across the enterprise.
The Starbucks organizational structure has geographical divisions depending on the physical locations of the business. The firm consists of three main regional divisions for catering to the global market:
- Asia-Pacific region and China
- North and South Americas
- Europe, Middle East, and Africa.
Within the American market, the Starbucks organizational structure also consists other geographical divisions:
- Western, and
A senior level executive is appointed to manage each geographic division. Hence, every local manager has to report to at least two of his superiors namely: the head of geographical division (for instance, President of Europe, Middle East, Africa), and the head of functional department (for instance to the Corporate HR Manager). The company's characteristic allows tightly monitored assistance of management for meeting the geographical demands. Starbucks's structure allows each head of division enough flexibility to adapt policies and plans according to individual market conditions. The promotion of Starbucks also follows the geographic segmentation to localize its marketing campaigns.
Within the Starbucks organizational structure, the company comprises of product-based divisions. The product categories are managed by these divisions. The corporation has, for instance, a coffee division and complementary items, a new baked commodity department, and another department for commodity business like bowls. Starbucks can invest in research and development through this characteristic of its business structure. In this way, through its organizational structure, the corporation develops and innovates various products. The company requires this development for competitiveness, especially when it comes to taking into account the dangers faced by the Starbucks Group.
Teams are employed in several aspects of the structure of organization of Starbucks Coffee. However, the teams are mainly noticeable on the lowest levels of Starbucks, particularly in the coffeehouses. For instance, the Company maintains teams at each coffeehouse to deliver consumers with services and goods. The firm is capable of giving effective and convenient services to consumers using this element of the corporate design of Starbucks. Team effectiveness is an important factor in the financial performance of its franchisee business and company-owned coffee shops. The organizational culture of Starbucks has an impact on how much team performance is accomplished. The development of the business relies on team-based aspects and corresponding strategy of management of human resources.
The Starbucks organizational structure contains various features. Nevertheless, the following ones are by far the most important to shaping the strategic management decisions within the company. In addition, the maintenance of integrity within the corporate structure is the responsibility of the different levels of the business. The structural traits that matter the most includes the organizational structure of Starbucks' head office and its management at the corporate level.
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